MUMBAI: The Indian economy has the potential to be the world's fastest growing economy over the coming decade, surging ahead of its South Asian economic rival China that will continue to see a slowdown, according to a research by Harvard University.
This is in line with the United Nations projections that India will continue to be the fastest growing economy in the world in 2016 and 2017 at about 7.3 per cent and 7.5 per cent respectively.
For the current fiscal, India's GDP is slated to grow at 7-7.5 per cent. “India tops the list for predicted annual growth rate for the coming decade, at 7.0 per cent,” said researchers at the Centre for International Development (CID) at Harvard University.
The CID data predicted that growth in emerging markets will continue to outpace that of advanced economies, though the gap is closing. CID is also bullish on East Africa, with Uganda, Tanzania and Kenya ranking in the top 10, with all predicted to grow at least 5.5 per cent annually. The growth forecast also looks favourably on Southeast Asia, where the Philippines, Malaysia, Indonesia and Vietnam look to drive growth well above global averages.
On the other hand, India far outpaces projections for its northern neighbour and economic rival, China, which the researchers expect to face a continued slowdown to 4.3 per cent growth annually to 2024, the report said.
South Asia and East Africa have the greatest potential for "rapid growth" as oil economies and other commodity-driven economies face the slowest growth outlook, it said.
"India has made important gains in productive capabilities, allowing it to diversify its exports into more complex products, including pharamecuticals, vehicles, even electronics," said Ricardo Hausmann, Professor of the Practice of Economic Development at Harvard Kennedy School and CID director.
He added that these gains in economic complexity have historically translated into higher income.
"China has already realised many of these gains, doubling per capita income in less than a decade. We expect that India's recent gains in complexity, coupled with its ability to continue improving it will drive higher income, positioning India to lead global economic growth over the coming decade," he said.